PRIOR LAKE, Minn. — The Prior Lake-Savage Area Schools board on Tuesday accepted the district's fiscal year 2025 audit after an external auditor issued a clean opinion but highlighted a decline in the district's fund balance and recommended attention to the district's fund balance policy.

"We were able to issue an unmodified opinion on the basic financial statements," said Jim Eichton of LB Carlson CPAs during the presentation to the board. "We did not have any findings to report this year; last year's findings were cleared."

Eichton told the board the district's overall fund balance declined by roughly $1,400,000 for the year ended June 30, 2025, compared with an anticipated decline of about $900,000 in the adopted budget. He noted the district's unassigned fund balance as a percentage of expenditures fell to approximately 7.6%, under the board's adopted target of about 8%.

"That information is now up to administration and the board to take and make decisions," Eichton said, adding that the accounting standard for compensated absences had been implemented in the year's reporting and warranted an "emphasis of matter" but did not change the clean opinion.

Board members asked for context about where the district could safely adjust spending and whether the single-audit portion for federal awards would affect timing. Eichton said federal guidance—the compliance supplement—had been delayed and that the Minnesota Department of Education had extended the single-audit deadline to match the federal deadline of March 31, 2026.

Director discussion focused on options for restoring the unassigned fund balance, reviewing five-year projections and the likelihood of a revised current-year budget in January.

The board voted to approve the audit as presented (motion carried 6-0). Director Bullion made a motion to approve the audit, which was seconded and carried on a 6-0 vote.

What happens next: administration was asked to prepare recommended budget adjustments and incorporate the audited results into 5-year forecasts and a revised FY26 budget to be considered by the board in the coming months.